Hindustan Foods declined 2.90% to Rs 749.55 after consolidated net profit dropped 10.59% to Rs 3.88 crore on 39.61% jump in revenue from operations to Rs 201.89 crore in Q1 June 2020 over Q1 June 2019.
Consolidated profit before tax (PBT) slipped 5.64% to Rs 6.19 crore in Q1 June 2020 over Q1 June 2019. Total tax expense fell 46.77% year-on-year to Rs 2.31 crore during the period under review. The Q1 result was declared during market hours today, 26 August 2020.
Consolidated EBITDA grew 33% to Rs 15.04 crore in Q1 FY21 from Rs 11.30 crore in Q1 FY20. The COVID-19 situation led to less than optimal capacity utilization of the factories. The Q1 FY21 figures magnified due to the increased capacities which came on line in Q4 FY20. The loss of sales resulted in under‐recovery of depreciation and interest costs. The factories stabilized production from May 2020 end and continued to perform at higher than pre‐COVID levels currently.
The company has entered into a long-term contract to manufacture a leading brand of toilet cleaner from its upcoming facility in Silvassa, Dadra and Nagar Haveli. The board has sanctioned a further investment of Rs 150 crore in Hyderabad, Telangana on the back of the successful commercialization of the liquid facility. The merger of the Mysuru and Coimbatore facility is also on track. The company has incorporated a wholly owned subsidiary company, HFL Consumer Products on 6 August 2020 to leverage further manufacturing opportunities.
Commenting on the Q1 performance, Sameer R. Kothari, the managing director of Hindustan Foods, said that: "Hindustan Foods dedicates the first quarter of 2020‐21 to the fantastic set of people who have fought at the frontlines of the COVID‐19 battle with scant recognition. It has been a quarter which truly tested the capabilities and competencies of the company. The performance of the company was affected by lockdown, the reverse migration of labour, the unavailability of trucks, the shutdown of the up‐stream factories and a resultant lack of raw and packing materials. While most of the products manufactured by the company fell in the category of 'Essential Products', the coordination with various government authorities and the differing understanding of the rules and regulations in various states lead to major challenge in starting up the facilities. Some of the plants started operations in April itself but were hampered by various issues leading to sub‐optimal capacity utilization with production stabilizing only in May and June. The team did a fantastic job in the face of adversity and managed to bring all the factories to the pre‐COVID levels by May end."
He further added: "The company did not exercise the option of moratorium and continued to pay the EMIs leading to a further strengthening of our relationship with our bankers who I believe will be more confident to support us in our future projects. Coming to the present times, I am pleased to confirm that we are on track to have record turnover in the second quarter. This has been aided by an increased demand for home and hygiene products in our factory in Hyderabad and also an increase in the demand for household insecticides in our factory in Jammu. The company had started a project in Silvassa to build a home care facility and I am pleased to inform that we have signed an agreement with a leading brand of toilet cleaner for the entire capacity. Though this project was delayed due to the COVID-19 lockdown, we are expecting to start commercial production from next month."
Hindustan Foods manufactures cereal-based food products and a range of instant mixes, baby foods, instant porridges, breakfast cereals and health drinks.
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